Bay Area air board approves global-warming fees for businesses

Larger businesses such as oil refineries will pay most to fund study of global warming

SAN FRANCISCO — The Bay Area's air pollution board Wednesday became the first in the United States to levy fees on businesses for the global warming gases they emit.

Declaring that local governments have a role in helping solve a global problem that Congress and the Bush administration have been slow to tackle, the nine-county pollution board decided to collect $1.1 million in annual fees from 2,500 businesses. The charges are based on the tons of carbon dioxide, methane and other greenhouse gases released by a business.

"Greenhouse gases is a threat to the air quality of the Bay Area," said Pam Torliatt, Petaluma's mayor and vice chairwoman of the Bay Area Air Quality Management District Board. "We need to take a leadership role."

The 15-1 vote in favor of the new fees followed a heated debate. Representatives of oil refiners and business groups argued that the fee will duplicate or interfere with state efforts to rein in global warming. Environmentalists called the fee a modest first step at holding businesses responsible for their global warming gases, which often result from burning large amounts of fuel.

The five oil refineries in the region will pay the bulk of the fees. Refineries will pay as much as $180,000 a year, and most businesses will pay $1 or less a year for the new fee.

The charges also will be applied to bakeries, print shops and other businesses which already have air pollution permits restricting their emissions of smog-forming gases.

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Air district administrators said the fee will recover the $1.1 million annual cost of the district's program to calculate, study local sources of global warming gases, and consider ways to reduce them.

Some scientists predict that higher global temperatures threaten to cause a variety of effects in the Bay Area, from flooded shorelines to higher smog levels. Because smog forms more readily at hotter temperatures, global warming threatens to subject more people to irritated lungs and eyes, asthma attacks and other lung problems, air quality experts said.

"This is a very small fee. The cost for doing nothing is very high, said Andy Katz, director of air quality advocacy for Breathe California.

Business groups said the air district's new fee and efforts to control global warming gases could disrupt the California Air Resources Board's far-reaching efforts to carry out the state's landmark Assembly Bill 32, which requires cuts in greenhouse gases statewide.

"It's not about the fee, but about the jurisdiction," said Dennis Bolt, a representative of the Western States Petroleum Association. "Now we don't know who is in charge."

After the fee was adopted, Bolt said he could not say whether his organization would sue over the fees. "We're going to study our options."

Also opposing the fee was the Contra Costa Taxpayers Association, the Contra Costa Council, and the California Council on Environmental and Economic Balance. Their leaders said they worry that air pollution districts around the state will pass greenhouse gas fees and rules instead of leaving it to the California Air Resources Board to oversee the regulation of the pollution.

The Sierra Club and the American Lung Association of California supported the fee.

The lone air board member to vote against the fee Wednesday was Mike Shimanski, a member of the Danville Town Council.

He said that once the fee is in place, it likely will escalate sharply, burdening oil refineries and other businesses with higher costs they will pass on to consumers. "Minimal as it is, do you think this fee is going to stay the same?" he asked. "It's going to rise, and before you know it, it's going to affect the economy."

Air board member Scott Haggerty, an Alameda County supervisor, said charging an oil company as much as $180,000 a year was a minimal fee when compared to the billions of dollars of profit the oil industry makes. "I'm having a hard time crying for them," Haggerty said.

Several air board members said they believe their action may serve as a model for other air districts to begin charging global warming fees.